HISTORIC PRESS RELEASE : More businesses, not benefit offices, for deprived areas [May 2002]

The press release issued by HM Treasury on 14 May 2002.

New £40 million investment funds to boost enterprise in disadvantaged communities by increasing access to finance for local entrepreneurs opened for business today.

The Bridges Community Development Venture Funds, supported by £20m of Government money and £20m from private investors, will only invest in businesses that will regenerate local economies in the most deprived areas of England. The Funds are launched today as new figures from the British Venture Capital Association show a record rise by 24% of investment in UK start-up companies.

Speaking at a breakfast event for investors co-hosted in Downing Street by Trade and Industry Secretary Patricia Hewitt, Chancellor Gordon Brown said:

“Britain needs an economy that must work not just for some people some of the time, but for all of the people all of the time; too many people are left out of the British success. Even at a time of record investment in start-up businesses by venture capital, we can and must do better.

The key to neighbourhood renewal is not more benefit offices but more businesses, which is why these new Funds are crucial to opening up opportunities and encouraging and rewarding enterprise. They will help dynamic and fast-growing enterprises to prove that deprived areas are not no-go areas for business but sources of future growth and entrepreneurship”.

Trade and Industry Secretary Patricia Hewitt said:

It is essential that Government meet the challenge of enterprise with new incentives to reward entrepreneurship. Small businesses are the key to future growth everywhere, and nowhere more important than in high unemployment areas.

These new funds will enable entrepreneurs in deprived areas to maximise access to all of the opportunities that the UK economy presents.”

The funds will be run as commercial operations by a newly established management team of professional venture capitalists, operating on standard venture capital principles. This means that they will look to provide capital to businesses that will be successful and grow strongly, bringing deprived areas the growth-enhancing benefits of the venture capital model.